Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

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Multiple Choice

Which of the following is an example of secured credit?

A loan backed by collateral, such as a mortgage

A credit card receivable

A trade receivable from a regular customer

An open account with no collateral

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Verified step by step guidance

Understand the concept of secured credit: Secured credit refers to a loan or credit arrangement that is backed by collateral, which is an asset pledged by the borrower to secure repayment. If the borrower defaults, the lender can seize the collateral to recover the loan amount.

Analyze the options provided: Review each option to determine whether it involves collateral. Collateral is a key characteristic of secured credit.

Option 1: 'A loan backed by collateral, such as a mortgage' - This is an example of secured credit because the loan is backed by an asset (e.g., property in the case of a mortgage).

Option 2: 'A credit card receivable' - Credit card receivables are typically unsecured, as they do not involve collateral.

Option 3: 'A trade receivable from a regular customer' and Option 4: 'An open account with no collateral' - Both are examples of unsecured credit because they do not involve collateral.